What if 7.5 million Individuals lose their providers?
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Many Americans look to Labor Day with fear. Then around 7.5 million of them lose their unemployment benefits.
The number is more than five times the 1.3 million people who lost aid in December 2013 when the country left the Great Recession.
Although the economy has steadily recovered from the public health crisis, more than 5.5 million jobs have been cut in the US since February 2020, with an average of 100,000 new Covid cases per day.
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As a result, Andrew Stettner, Senior Fellow of the Century Foundation and national unemployment expert, is raising the alarm about the consequences of ending benefits next month. CNBC spoke to him last week. The following interview has been edited and shortened for the sake of clarity.
CNBC: How has unemployment benefits changed during the pandemic?
HOW: Congress decided to cover many people who normally weren’t eligible for benefits, including gig workers and freelancers, and people who couldn’t work because they had to look after their children when the school was closed. We have also increased the level of benefits.
CNBC: What was the impact?
HOW: These changes are the unsung hero of economic recovery. We had laid off millions of workers, but we saw no increase in poverty. And it kept consumer spending solid and stable.
CNBC: What do you expect from Labor Day if these changes are gone?
HOW: When you meet someone who is homeless, the first thing they’ll tell you is, “This all happened when my unemployment benefit ran out.” We put a lot of families at risk.
CNBC: Why do you think September is too early to end the performances?
HOW: The latest job report was very strong, but that was before the delta. We also know that the leisure and hospitality sectors have the fastest employment growth. These jobs are not so well paid, and they also require you to be on your feet. Not everyone can do that and not everyone wants it if you could still get this disease yourself with the vaccine. And people have only been able to look for work for a few months when they get vaccinated in April or May. We were in a very deep hole and it will take time to get it out.
CNBC: What do you think of the argument that ongoing performance contributes to labor shortages?
HOW: We don’t see that in any data. States that have already canceled benefits do not attract employees faster than states that have retained them. People know the benefits are temporary. Even if we extend it for a couple of months, that’s a few thousand dollars more, which is very different from a job that could last 10 years. Unemployment gives you time to pay for your basic groceries, put gas in the car, and food on the table while you try to get back to work.
CNBC: Who Will Be Most Affected by the End of Aid?
HOW: Black workers are really affected by this Covid-19 pandemic. As things start to recover you will see white workers being hired more and more frequently. Even caregivers, people who lost their jobs because their children’s school was closed or someone in their family got sick, many of them still have to find a new job.
CNBC: Do you have any advice for those who are still unemployed looking at this deadline?
HOW: You don’t have to do this alone. You should use the resources your state has provided to assist you with your job search. You can retrain. You may even be able to get a benefit upgrade if you are in a retraining program.
Even if you can’t find a job in September, don’t be too proud to seek other help, whether it’s health insurance or nutritional support, so that you and your children can get something to eat. This is not your fault; This is a seismic experience.